Author: Bill Roth • Date: May 27, 2016 • Appears in:
How CSR (Corporate Social Responsibility) Is Driving Purposeful Food Sales To Record Levels
The traditional food and beverage industry is in crisis. Pop, fizz, drink … WEIGHT GAIN is now a growing consumer belief. This shift in consumer perception has driven soda sales to a 30-year low. Traditional food and beverage brands have lost the mainstream consumer’s trust. Seventy-five percent of consumers believe food manufacturers are more focused on profits than human health.
This massive mistrust of mass-marketed foods is pushing consumers to abandon old buying habits. Increasingly, consumers are buying foods and beverages that are outside of mainstream food brands. Mass-marketed food brands now confront tepid sales growth. The sale of natural foods are achieving double annual sales growth.
The business question is: Will food brands realign with customer concerns, or will this industry continue to deliver food that taste greats, costs less, and is destructive to humans, animals and the environment?
Food brands are losing trust and market share
Twenty-five percent of the largest food companies have historically sold approximately half of what America eats and drinks. That ended in 2014. Now these branded food and beverages now account for 45 percent of sales. The CEO of Campbell Soup Co. admitted this new reality by saying, “We are well aware of the mounting distrust of Big Food.”
To-date the industry is responding with bandaid solutions. The good news is that companies like Kraft are removing artificial coloring from their food. There are daily news releases from companies like Taco Bell that announce product improvements gained from eliminating artificial colors, flavors and added trans fat. But the industry’s weak sales results suggest that these “do less harm” steps will not win back consumer trust or increase sales.
Consumers want foods that are healthy for them, animals and the environment
Consumer have moved their food procurement expectations beyond the removal of questinable food ingredients. They want foods that stand for something. They want food that has a purpose in addition to tasting great and being affordable. The three purpose based criteria sought by consumers are:
- Mission based. Consumers want their purchases to achieve a greater good.
- Repurposed ingredients. Consumers target achieving less food waste. They want unused food to be repurposed, for example, as compost.
- Ethical and sustainable. Food should not be produced by harming people, animals or the planet. This is driving increased purchases of grass feed beef. The search for more sustainable food is accelerating sales of plant based foods that have a lower environmental impact compared to animal based food. And food should absolutely not be produced using slave labor like foreign sourced seafood.
Consumers increasingly buy more and pay more for purposeful food
The consumer shift toward purposeful food offers a tremendous business opportunity. One of out three consumers will pay 10% more for purposeful food. This is fantastic news for food businesses seeking to offer both value and values. It is a tremendous example of how CSR enables pricing power in this age of global, mass marketed price discounting! These are the five food product attributes created through CSR that consumers expect if they are going to pay a 10% pricing premium:
- Pay workers fairly and provide safe working conditions
- Be GMO free
- Organic certification
- Be produced in a manner that reduces global warming
- Environmentally sustainable